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In Forward Construction Co. & Ors. v. Prabhat Mandal, Andheri & Ors., AIR 1986 SC 391 the Supreme Court explained the scope of constructive res judicata as envisaged in Explanation IV to Section 11 of CPC and observed that the High Court was not right in holding that the earlier judgment would not operate as res judicata as one of the grounds taken in the present petition was conspicuous by its absence in the earlier petition.

The Court held as under:
“Explanation IV to S.11, CPC provides that any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. An adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided as incidental
to or essentially connected with the subject matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matters of claim or defence. The principle underlying Explanation IV is that where the parties have had an opportunity of controverting a matter that should be taken to be the same
thing as if the matter had been actually controverted and decided. It is true that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided. The first reason, therefore, has absolutely no force.”

Dr. Subramanian Swamy v. State of Tamil Nadu & Ors. (2014) 1 SCALE 79).
If the issue has been already decided on merit between the same parties in an earlier litigation, it cannot be decided again. Explanation (4) thereof, also provides or constructive res judicata which has to be read like the provisions of Order II Rule 2. It
also applies to the proceedings in the Suit.